The entrance of the European court of justice in Luxembourg.
Photograph: Francois Lenoir/Reuters

Britain will be subject to the rulings of European courts after Brexit, the government has conceded, in an apparent climbdown from its promise of judicial independence.

In the latest in a series of policy papers that seek to blur the edges of hard Brexit, the government argues that for the smooth settlement of cross-border disputes it is necessary that foreign judgments sometimes apply to individuals and businesses in the UK.

“A judgment obtained in one country can be recognised and enforced in another,” said a government source speaking anonymously before the paper’s publication on Tuesday.

“For example, with more and more families living across borders, we need to make absolutely sure that if and when problems arise they can be reassured that cross-border laws will apply to them in a fair and sensible way.”

Ministers will argue this is a separate matter from staying under the jurisdiction of the European court of justice (ECJ) in Luxembourg, which adjudicates over disputes involving European Union law.

Their cross-border disputes policy paper seeks to maintain a system of civil judicial cooperation covering consumer, business and family disputes that straddle more than one country.

The Department for Exiting the EU (Dexeu) said: “These could relate to issues such as a small business that has been left out of pocket by a supplier based in another EU country, a consumer who wants to sue a business in another country for a defective product they have purchased online, or a person who needs to settle divorce child custody or child maintenance issues with a family member who is living in a different EU country.”

But the distinction may prove a narrow one for individuals who could yet find themselves subject to the rulings of judges in France or Germany long after Britain has left the EU.

Though primarily focused on the ECJ, Theresa May’s promises of judicial independence have been couched in broad terms that imply foreign judges would no longer hold any sway in Britain.

“We will not have truly left the European Union if we are not in control of our own laws,” the prime minister said in the Lancaster House speech that set out her Brexit strategy in January.

“Leaving the European Union will mean that our laws will be made in Westminster, Edinburgh, Cardiff and Belfast. And those laws will be interpreted by judges not in Luxembourg but in courts across this country.”

Even narrowly defined opposition to the ECJ is under growing strain this week as a number of position papers set out ways in which Britain could be required to submit to international courts or arbitration after Brexit.

The Labour MP Alison McGovern, a remain campaigner, accused the government of muddling its position in pursuit of an arbitrary red line.

“The vagueness and incoherence of the government’s proposals prove what an appalling error they committed by making ending the jurisdiction of the ECJ a red line in negotiations,” she said

“To have any kind of relationship with Europe – be it on trade, citizens’ rights or security – there will need to be a court in place to resolve disputes. That court will include European judges, will have the power to make decisions that affect the UK, and most likely will shadow the ECJ in the vast majority of cases.

“The government will end up taking back control from one court and immediately handing it to another – which is hardly what millions of people had in mind when they voted for Brexit.”

But the latest paper was welcomed by business leaders, who feared that London’s role as an international centre for dispute resolution could have been put in jeopardy if Britain had left the reciprocal cross-border scheme.

“Any business conducted across borders involves risks, and it’s one of the areas where companies value agreements between governments that give them certainty about the process if something goes wrong,” said Allie Renison, head of EU and trade policy at the Institute of Directors.

“The IoD has welcomed the push from government to ensure that the forthcoming paper not only addresses ongoing civil and commercial disputes for businesses operating across the EU but also lays out principles for future judicial cooperation between both sides.”